]]>Another Successful 6ON6 Volleyball Classichttp://blog.cushwake.com/charlotte/another-successful-6on6-volleyball-classic.html
Tue, 14 May 2019 14:22:35 +0000http://blog.cushwake.com/?p=23901Last Thursday, Cushman & Wakefield was represented with two teams for the 12th Annual 6ON6 Volleyball Classic. The event joined teams from the Charlotte commercial real estate industry in a head-to-head competition that promotes camaraderie and networking while raising awareness and support for local

]]>Last Thursday, Cushman & Wakefield was represented with two teams for the 12th Annual 6ON6 Volleyball Classic. The event joined teams from the Charlotte commercial real estate industry in a head-to-head competition that promotes camaraderie and networking while raising awareness and support for local charities.

This year’s Classic was proud to contribute its proceeds, $195,000 (25% increase from 2018) to Freedom School Partners. Freedom School Partners promotes the long-term success of children by preventing summer learning loss through igniting a passion for reading and inspiring a love of learning.

Here’s a recap of how the day unfolded for both Cushman & Wakefield teams:
ROUND ONECushman & Wakefield #1 knocked off Stream in the 1st round 21-15. It was a close one, but the team was just getting into its groove and working out some kinks.

Cushman & Wakefield #2 had a tough loss to Lincoln Harris 23-21 with the hope to rebound in the second round.

ROUND TWOCushman & Wakefield #1 pulled off a great win vs HFF in round 2. The team looked great and all the hard practice was starting to pay off!

Cushman & Wakefield #2 had a tough loss to Avison Young. It was a tough morning for Cushman & Wakefield #2, but still hopeful to pull off the “W” in its final match.

Cushman & Wakefield #2 knocked off Foundry (formed 2018 6ON6 Classic Champs) for a great win! Team #2 went 1-3 in regular pool-play and was pulled in to cheer on Cushman & Wakefield #1 in the playoffs.PLAYOFFSThe rain became to come down as the semi-final battle started.
Unfortunately, the mist cooled off the court for Cushman & Wakefield #1, who faced the best dressed Providence Group and ultimate champion.

Kudos to the entire team who played and helped a great cause! Special thanks to Caroline Cheek and Summer Gilliam with Cushman Cares who coordinated our sponsorships, Jacqui Aaron as our photographer and Julee Zack and Chelsea DePetro for being our fearless leaders and captains.

]]>Charlotte Economic Outlookhttp://blog.cushwake.com/charlotte/charlotte-economic-outlook.html
Wed, 08 May 2019 13:18:06 +0000http://blog.cushwake.com/?p=23853Overall, the U.S. economy remains healthy, powered by solid fundamentals and tax-cut stimulus, and most economists expect the expansion to continue at least through 2019. So far in 2019, most major economies worldwide are still growing at a reasonably healthy

Overall, the U.S. economy remains healthy, powered by solid fundamentals and tax-cut stimulus, and most economists expect the expansion to continue at least through 2019. So far in 2019, most major economies worldwide are still growing at a reasonably healthy clip, still creating jobs and still absorbing space.

Labor shortages are one of the most significant challenges commercial real estate faces. With unemployment at record lows and wages rising, the cost of labor will increase, impacting profitability. However, wage growth can be considered a positive as it boosts consumer spending and feeds profitability, thus creating more jobs and more demand for space.

Locally, Charlotte’s unemployment rate dropped from 4.7% in 2007 to 3.3% currently. Job growth is expected to slow but to remain healthy. Charlotte is the No. 22 city for expected total nonfarm employment gains, projected to add 23,500 jobs in 2019.

One popular trend in the office sector has been growth of tech companies. Charlotte is ranked No. 6 for tech growth, with 13.7 million square feet of net absorption from 2008 to 2018. To meet the increasing amount of office demand, 3.17 million square feet of office space is under construction in Charlotte, approximately 3% of the overall market inventory.

Coast-to-coast, demand by renters for apartments is 300% higher than it’s ever been before, and the Sun Belt has outpaced any other region for demand. Charlotte ranks No. 13 for net absorption from 2009 to 2018, with 52,000 units absorbed. Since 2008, Charlotte ranks No. 1 for net absorption relative to its size. Overall net office absorption over the past 10 years was equal to 39.6% of its 2008 total office inventory.

Congratulations to Grant Keyes for being one of ten individuals selected to the 2019 Charlotte Region Commercial Board of Realtors (CRCBR) Leadership Class. Grant was chosen for the impact he has, and continues to make, within the CRE industry.

Congratulations to Grant Keyes for being one of ten individuals selected to the 2019 Charlotte Region Commercial Board of Realtors (CRCBR) Leadership Class. Grant was chosen for the impact he has, and continues to make, within the CRE industry. He is a future leader to definitely keep an eye on. The

]]>Jennifer Miles Highlighted in CREW Charlotte Member Spotlighthttp://blog.cushwake.com/charlotte/jennifer-miles-highlighted-in-crew-member-spotlight.html
Thu, 25 Apr 2019 20:16:44 +0000http://blog.cushwake.com/?p=23688Jennifer Miles, Transformation & Transition Manager for Cushman & Wakefield’s Global Occupier Services (GOS) platform, was recently highlighted in CREW Charlotte’s Member Spotlight. She has been a member of CREW for one year, and was named one of Real Estate

]]>Jennifer Miles, Transformation & Transition Manager for Cushman & Wakefield’s Global Occupier Services (GOS) platform, was recently highlighted in CREW Charlotte’s Member Spotlight. She has been a member of CREW for one year, and was named one of Real Estate Forum’s Women of Influence last year. Check out the Q&A with Jennifer below!

Current job: Transformation & Transition Director

Summary of your role in the company: I lead cross functional teams that integrate existing and new clients into all commercial real estate areas (Transaction Management, Project Management, Facility Management, Lease administration, etc.) for Cushman and Wakefield’s Global Outsource Business. In addition, I lead teams that implement Innovation and transform the services provided by those same teams for existing clients.

How I chose my occupation: It allows me to leverage my Six Sigma Blackbelt Experience with the ability to consult with different clients and get exposure to different industries and all facets of Commercial Real Estate.

Years in the business: 11 years

My specialization is: Strategic Sourcing and Process Transformation

A good lead for me is: A client that is considering putting their Outsourcing business out for bid or outsourcing for the first time.

The most satisfying part of my job is: Having a client, renew because we were able to show the value that our company can provide, who was thinking about putting the business out for bid.

Best leadership advice I have been given: Treat everyone with respect. You never know who you will work with in the future as a peer, boss or client.

Greatest professional achievement: Being recognized as Real Estate Forum Woman to Watch.

Number of years with CREW: 1 year

Most significant CREW connection: Adrienne Bain, our past president

Place of birth/hometown: Eutaw, Alabama (population 3000)

Number of years in Charlotte: 13 years

Family: Husband, Charles; Son, Charles II(graduating senior); we also foster so have one to two additional kiddos on a regular basis.

My ideal vacation spot: Maui, HI

Hobbies/Interests: Reading, playing tennis and traveling

I wish I could: Clone myself; I, like a lot of working moms am pulled in a lot of directions. I want to take care of my family, be a high achiever at work and still have time to take care of myself through working out and playing tennis. There never seems to be enough hours in the day for all that I want to do.

Cushman & Wakefield’s Charlotte office recently hosted a group of Corvian Community School first graders. The twenty-two students had a wonderful time visiting the new Cushman & Wakefield Charlotte office, eating pizza and participating in activities planned by the

Cushman & Wakefield’s Charlotte office recently hosted a group of Corvian Community School first graders. The twenty-two students had a wonderful time visiting the new Cushman & Wakefield Charlotte office, eating pizza and participating in activities planned by the local Cushman Cares committee.

The event coincided with the NCAA Basketball Tournament, and the children played games including shuffleboard and basketball, and colored basketball jerseys representing their favorite college teams while tournament highlights played in the background. Caroline Cheek, Cushman Cares Co-Chair, stated, “Hosting the students in our office and centering the event around college basketball was purposeful. We hope this will keep the students enthusiastic about college and their future success.”

Corvian Community School is a North Carolina Public Charter school that believes every child has the right to an excellent education. The elementary school curriculum reflects their belief that every child can and will succeed in ways that reflect his or her own aptitudes and interests. The local Cushman Cares committee looks forward to partnering again with the school and continuing to give back to the surrounding communities.

]]>Charlotte State of Real Estate Recaphttp://blog.cushwake.com/charlotte/charlotte-state-of-real-estate-recap.html
Tue, 22 Jan 2019 17:52:40 +0000http://blog.cushwake.com/?p=22779While downside risk exists, the U.S. economy is poised for another strong year, and Charlotte is well positioned to continue to thrive. These and other topics were key messages during the 12th Annual Outlook on the Commercial Real Estate Market

]]>While downside risk exists, the U.S. economy is poised for another strong year, and Charlotte is well positioned to continue to thrive. These and other topics were key messages during the 12th Annual Outlook on the Commercial Real Estate Market in downtown Charlotte hosted by Katten Law and Cushman & Wakefield.

During her presentation, Revathi Greenwood, Americas Head of Research for Cushman & Wakefield, outlined several key trends for 2019: the current economy and recession indicators, talent shortages, geographic expansion of the technology sector, industrial strength and commercial real estate capital flows.

Recession indicators: The current expansion is on track to become the longest in U.S. history by the middle of 2019. There is softening in some metrics (e.g., the yield curve has compressed lately and the stock market has experienced volatility), but job creation, consumer confidence and small business optimism continue to be sturdy. Most economists expect the economic expansion to continue through 2019.

Talent availability: December 2018 marked the 99th consecutive month of U.S. job growth. That is twice as long as the previous high of 48 months between July 1986 and June 1990. At 3.8%, the unemployment rate in Charlotte is in line with the U.S. average, and it is forecasted to remain below 4% through 2019. Strong job growth and a disproportionately high number of college graduates (34.4%) will continue to make Charlotte an attractive place for companies to move and expand. Charlotte is forecast to be the 4th fastest growing U.S. city for young worker population (ages 25-39) during the 2020’s, increasing that cohort by 25%.

Tech sector expansion: Rents and real estate values have increased faster in cities with a large tech sector presence. Charlotte has over 65,000 tech workers and is considered one of the 25 markets Cushman & Wakefield has identified in its most recent Tech Cities The growing fintech sector has helped Charlotte experience above average rental rate growth over the past eight years. Over that same time, the average price per square foot of office space sold has more than doubled in Charlotte, putting its appreciation behind only Austin, San Francisco and Silicon Valley among the 25 tech markets.

Industrial demand: Charlotte is well situated as a distribution hub with over 50% of the U.S. population within 650 miles. There was over 4 msf of net absorption in the Charlotte market each of the past two years, and Cushman & Wakefield is forecasting 2019 absorption to be significantly higher. This strong tenant demand will offset most of the new construction coming online in the next 12 months.

Commercial real estate capital flows: The amount of capital targeting North American commercial real estate was just shy of $200 billion in January of 2019, up 113% from four years ago. This demand has led to, and is likely to continue to drive, strong sales activity—likely to be bolstered by Opportunity Zone Legislation. Charlotte set a record in 2018 with $5.3 billion of sales across multifamily, office, industrial and retail assets. This placed Charlotte as 12th among secondary U.S. markets.

These are several of the reasons that optimism remains high for 2019. Indicators point to another strong year for the U.S. economy and most commercial real estate markets. Charlotte has a number of strengths—strong labor force, low costs of living, warehouse/distribution reach, diverse office economy—that will allow it to thrive as this expansion continues.

Sources for data cited in this blog post include: U.S. Bureau of Economic Analysis; U.S. Bureau of Labor Statistics; U.S. Census Bureau; Moody’s Analytics; Prequin; RCA; Cushman & Wakefield Research

Will Propst, Research Analyst – Since joining Cushman & Wakefield in 2018, Will has provided market intelligence to the greater Charlotte region primarily focusing on the current and future trajectory of the Office and Industrial markets. A current Master’s student at UNC Charlotte’s Childress Klein Center for Real Estate, Will continues to focus on local and national trends affecting Charlotte’s real estate market.

The U.S. real estate market accounts for 13% of the GDP, and most operators specialize in very select segments of real estate, creating lots of fragmentation. There’s no clear leader in real estate “tech,” but capital

The U.S. real estate market accounts for 13% of the GDP, and most operators specialize in very select segments of real estate, creating lots of fragmentation. There’s no clear leader in real estate “tech,” but capital is flowing rapidly into the space, with $5.2 billion invested in 2018, up from $1.4 billion in 2014

Financial services is a leading sector in the adoption of tech, specifically Artificial Intelligence, which may affect how this sector uses office and retail space in the near future as support and sales positions are enhanced by the use of AI.

Examples include voice recognition to control building systems, biometric identification to control building access, and data-driven decision making processes.

The Bureau of Labor Statistics anticipates 10% growth in financial occupations (773,000 jobs) by 2026, many of which will be analysts, HR specialists, loan officers, and training personnel using AI tools to enhance productivity (great for cities driven by the financial sector).

Employment in STEM (science, tech, engineering, math) jobs are projected to grow at a rate 73% faster than the broader market through 2026

Most of America’s road system dates from 1950 – 1970 with an effective life of 50 years. eCommerce and the increase in parcel delivery are clogging the highways and our infrastructure, which is largely at the end of its useful life, and taking a toll. Someone (likely the taxpayer) will be absorbing significant costs in the near future.

Best Bets for 2019:

Core and Core-Plus Opportunities

Investors remain vigilant about risk management, and while not moving significantly into tertiary markets or higher-risk properties, they are targeting markets characterized by job growth but with better pricing than prime assets in major markets.

Think creative-office, submarkets in the path of growth, or walkable urban-suburban submarkets

Quick Flip Value-Add

Deals with the ability to execute and exit in 2020.

Most will be in second-tier cities in the south and intermountain states, targeting middle market sectors where underserved demand can be satisfied

Expansionary Markets

With more emphasis placed on amenities, sustainability, and wellness, expansionary markets are favored where buildings have access to transit, urban-like amenities and F&B options, larger floor plates with more light, and customizable design

This effect will be more pronounced than in previous cycles

Anything Industrial

Offers great risk-adjusted returns, barring a trade war of serious proportions

Issues to Watch in 2019:

An accumulating number of triggers, rather than one single trigger, could cause the next downturn, such as labor shortages, flattening of the yield curve, a potential Wall Street asset bubble, tariff and trade tensions, and geopolitical risks.

Cap rates have trended low, but are also convergent, with just a 30 basis point difference between office, retail, and industrial at mid-year 2018, suggesting that some deals may be pricing risk too cheaply.

Total cost of major natural disasters in 2017 was the same as the combined previous 10-year period (largely hurricane Maria, Irma, and Harvey). The evidence of floods, wildfires, and storms in 2018 indicates the intensifying risk. Expect property/casualty insurance to rise in 2019 as insurance companies will price the massive payouts into future premiums

In conclusion, I’ll leave you with my favorite quote from the Emerging Trends Report by the CEO of a top 5 multi-family REIT, and one that applies to all sectors of business:

“What do we do that nobody else does, and the consumer can’t do for him or herself?”

As we look at the year ahead, we need to stay focused on our core competencies and what we do best, but remember that it’s our role is to ultimately benefit the consumer and to improve the built environments around us.

Jared Londry is a Director on the Charlotte Capital Markets team where he specializes in the disposition of office and mixed-use assets on behalf of institutional investors throughout the Carolinas. He has been involved in over $1.3 billion of investment property transactions in his tenure with Cushman & Wakefield.

Each year, ULI and PWC release Emerging Trends in Real Estate, a report that effectively predicts the CRE outlook across North America. I’ve heard it coined “the real estate bible.” In my opinion, Emerging Trends is a

Each year, ULI and PWC release Emerging Trends in Real Estate, a report that effectively predicts the CRE outlook across North America. I’ve heard it coined “the real estate bible.” In my opinion, Emerging Trends is a comprehensive look at the broader real estate market with details that many of us choose to avoid until it’s too late. It’s worth the full 121-page read, but for those of you who prefer cliff notes, feel free to enjoy my synopsis below. Hopefully there’s something of value, or at a minimum, a stat you can throw around at your next closing dinner.

Caveat – I’m just an office investment sales broker focused on the Southeast, so if my opinions come off as biased, they probably are. Anyway, here’s what I took away from Emerging Trends 2019.

General Overview: Investor Adaptation

What’s the difference between Value-Add and Opportunistic?

Opportunistic investors chasing higher yields are subject to significant questions about future liquidity, price, and user-market attractiveness. Long story short, it may be leasable, but the first question you should ask yourself is, “How do I get out of this?” At this stage in the cycle, value-add means SOME “meat on the bone;” opportunistic means caution.

Capital is Undergoing Functional Transformation

Investment decisions are intensely concerned with elements of obsolescence – location, technological, design – under the potential impact of innovation. One portfolio manager noted, “one of my top concerns is that I will purchase an office building that in 5 years won’t meet the needs of the market.” Ceiling heights, window lines, and non-walkable commodity suburban properties will receive further scrutiny over time

The Pace of Change Makes Investment Decisions More Complicated

Investment committee decisions are more focused on viability and adaptability of an asset to weather any potential storm. The search for yield at the given point in the cycle is pushing capital to pursue more opportunistic and entrepreneurial ventures, though once past the peak, we’ll rotate to risk aversion and capital conservation

Interesting Stats by Product Type:

Office – 45% of total absorption was accounted for in just 4 markets: San Jose, San Francisco, Seattle, and Washington, DC (of 58 markets surveyed)

Industrial – 41% of people polled in 2018 are willing to pay extra for same-day delivery

Retail – Compared to the U.K., Germany, and France, the U.S. has 6, 8, and 10 times more square feet of retail per capita

Senior Housing – Two of every three senior housing properties were built before 2000, creating a relatively old stock of product.

Residential – Millennials experienced the largest gains in homeownership rates among all age groups in 2017, representing 1/3 of all home purchases

Self-Storage – In 1987, 1 in 45 people used self-storage, today, 1 in 13 people use it

The Changing Office Environment: Amenities Gone Wild

Consider it an example of curation in real estate services. Office tenants are looking for robust amenity packages beyond a “check the box” fitness center and conference room. Landlords are operating more like full-service hotels, providing direct tenant services, focusing on optimal use of common areas. They are attracting tenants with access to cooking classes, yoga, and golf simulators. As amenities continue to ratchet up, behavioral economists note “loss aversion is more powerful than the satisfaction of prospective gains, leading to an endowment affect that causes people to overvalue a good once they possess it.” Multi-family developers started the trend, and these amenities are here to stay.

Equity Sector Review:

Institutional Volume Slipped

Core assets are scarcer, and pricing is extremely high

Volume for Institutional Investors and Pension Funds represented 21% in 2017, down from 26% the prior year

REIT’s – Trading Below their NAV’s

Meaning their share price is lower than their total implied asset values, across the majority of REIT sectors

This makes acquisitions erosive to shareholders, not accretive

Off-Shore Capital – Becoming Less Active

China and Canada still lead volume in this sector

South Korea, Germany, and the Middle East are stepping up allocations in U.S. investment

Private Equity Remains Most Active Capital Source

Accounted for 53% market share in secondary markets in 2017, and 67% of market share in tertiary markets

Average price of a private capital deal is $10.8M (1/3 of other capital sources)

These plans exceed $20 trillion in capital, and yet typically do not invest in real estate

Slow growth in returns for DC’s has them eyeing real estate as a potential new asset class with as much as 10% allocation in their portfolio ($2 trillion of new capital into our space)

This would be a serious game changer

Debt Sector Review:

The rollback of Dodd-Frank restrictions will free up additional debt capital for the years ahead

Loan-to-cost ratios and loan constants have been holding steady

Life CO’s – very little difference exists in the interest rates between 5, 7, and 10-year loans, potentially because lending volume is greater at the longer maturities that better match life companies’ liability structures

Debt funds are growing rapidly, but still account for only 1% of commercial real estate debt universe, with 104 private debt vehicles in the market

Jared Londry is a Director on the Charlotte Capital Markets team where he specializes in the disposition of office and mixed-use assets on behalf of institutional investors throughout the Carolinas. He has been involved in over $1.3 billion of investment property transactions in his tenure with Cushman & Wakefield.

Tis the season for giving! Our local Cushman Cares chapter participated in Pause for Paws, and during the past two weeks we held a drive for food, pet toys, and supplies to benefit the Charlotte Humane Society. The Humane Society of Charlotte is a community resource committed to delivering effective, innovative services that strengthen the human-animal bond and improve the lives of companion animals and the people who care about them.